I. Soybean

 

Price

 

Domestic soybean: Prices are partially not available as most traders are still in holiday this week, and will be gradually offered next week. Soybean market stays in thin trade now for the majority of buyers tend to wait right after the festival, but there is no lack of several traders who make shipments to book profits. But soybean surplus is decreasing in farm houses, so that farmers are unwilling to sell stocks. In addition, the supply of high-quality soybeans is in shortage due to a sharp production reduction in regions like Jiangsu and Anhui provinces, which highlights a price hike in quality crops. In addition, port traders for imported soybeans are also not offering now, so that domestic soybeans enjoy a larger share. Overall, short-term domestic soybean prices may steadily fluctuate at a narrow range, and participants can keep an eye on arrivals of non-GM soybeans at domestic ports.

 

Imported soybean: Market trade has not returned normal right after the Chinese Lunar New Year holidays, so purchases and sales are both dismal. In addition, Chinese importers are also buying soybeans from secondary producing countries, which is also bearish to imported market in China. However, imported soybean supply remains small at domestic ports now. And U.S. soybean prices are strong due to strong demand and as rainfalls delay soybean harvest in Brazil, so soybean import cost remains high in China. Russia announced to impose 30% of export tariff on soybeans from Feb 1 to Jun 30 next year, so China’s imports of Russian soybeans may reduce, which is also supporting the imported soybean market. In a hybrid of the bull and the bear, imported soybean market will likely be little changed in the short run. Participants can keep an eye on imported soybean arrivals and demand in China.

 

China's Soybean Weekly Price（CNY/Tonne）
Region		Grade	This week	Last week	Variation
Northeast China	Heilongjiang	Domestic, GB Grade 3	5780	5760	20
	Inner Mongolia	Domestic, GB Grade 3	5660	5600	60
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	7700	7700	0
	Shandong	Imported, Argentina	N/A	N/A
		Imported, Brazil	N/A	N/A
		Imported, Uruguay	N/A	N/A
North China	Tianjin	Non-GM, Ethiopia	N/A	5450
		Non-GM, Ukraine	N/A	N/A
		Non-GM, Canada	N/A	N/A
		GM, PNW	N/A	N/A
		GM, U.S. GULF	N/A	N/A
National average		Domestic soybean	5780	5760	20
		Imported soybean	4800	4800	0

 

 

 

 

Crush: With the approaching of the Chinese Lunar New Year, operation rates are drastically lower in week 6 (Feb 6-12). Soybean crush at domestic mills totals 913,600 tonnes (meal 721,744 tonnes and oil 173,584 tonnes), down 1,073,700 tonnes or 54.03% from 1,987,300 tonnes last week. Meanwhile, operation rates (capacity utilization) are 25.76%, down 30.28% from 56.04% in the previous week.

 

Operation rates further decline in week 7 (Feb 13-19) that falls on the new year holidays. Soybean crush at domestic mills totals 329,000 tonnes (meal 259,910 tonnes and oil 62,510 tonnes), down 584,600 tonnes or 63.98% from 913,600 tonnes last week. Meanwhile, operation rates (capacity utilization) are 9.28%, down 16.48% from 25.76% in the previous week. Soybean crush is expected to pick up to 1.6 mln tonnes next week and to 1.95 mln tonnes in week 9.

 

Soybean crush nationwide is estimated at 4.84 mln tonnes in February at current utilization rate, against the 8.8145 mln tonnes in the previous month and 6.3247 mln tonnes a year earlier.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 36,887,944 tonnes, up 4,788,544 tonnes or 14.92% from 32,099,400 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 11,397,006 tonnes, up 1,331,249 tonnes or 13.23% from 10,065,757 tonnes of the corresponding period in 2020.

 

 

Inventory: Soybean stocks keep building up in China as soybean crush is sharply lower during the Lunar New Year holidays while imported soybeans are arriving at domestic ports. In the week as of Feb 19, China’s imported soybean stocks in coastal regions total 4,760,400 tonnes, up 220,700 tonnes by 4.86% from 4,539,700 tonnes last week (week 6) and up 779,100 tonnes by 19.57% from 3,981,300 tonnes from that before the festival (week 5), but down by 2.49% from 4,882,200 tonnes from a year earlier.

 

 

Arrivals and the outlook: According to Cofeed, soybean import is predicted to be 97 cargoes or 6.407 mln tonnes for February, 6.1 mln tonnes for March and 7.6 mln tonnes for April, 9.3 mln tonnes for May and 10.3 mln tonnes for June.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices are mostly lower this week (Feb 18-19). As of this Friday, prices settle at 3,600-3,750 CNY/tonne in domestic coastal regions, mostly down 30-110 CNY from that before the festival, or Feb 5. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,900	3,960	-60
North China	Tianjin	3,740	3,750	-10
	Hebei	3,750	3,760	-10
Central China	Hubei	3,750	3,790	-40
	Henan	3,780	3,790	-10
East China	Shandong	3,700	3,720	-20
	Jiangsu	3,680	3,690	-10
	Zhejiang	3,680	3,690	-10
	Shanghai	3,680	3,700	-20
	Fujian	3,700	3,740	-40
	Anhui	3,700	3,790	-90
South China	Guangdong	3,600	3,600	0
	Guangxi	3,690	3,730	-40
National average		3,694	3,713	-19

 

 

Inventory: Soybean meal stocks are slightly higher in China this week as shipments remain sluggish while some oil mills are in operation during the he Lunar New Year holidays, of which stocks in north China see a biggest growth and some are under swollen stocks. In the week as of Feb 19, China’s soybean meal stocks in coastal regions are 696,900 tonnes, up 25,700 tonnes by 3.82% from 671,200 tonnes last week (week 6) and up 247,000 tonnes by 54.90% from 449,900 tonnes from that before the festival (week 5), and also up 101.12% from 346,500 tonnes from a year earlier.

 

Usually, soybean meal stocks will build up temporarily after the festival as some mills keep operating whilst the delivery comes to a standstill during the festival holidays. And later, as consumers started to make replenishment and some domestic processors will keep low operation rates this year due to a delay in soybean harvest and shipment in Brazil, the overall soybean meal stocks will decline again.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices move sharply higher this week (Feb 18-19). As of this Friday, the price for GB Grade I settles at 9,010-9,480 CNY/tonne in domestic coastal regions, a rise of 520-590 CNY/tonne from that before the festival, or Feb 5. The overall nationwide price index is 9,230 CNY/tonne, a weekly rise of 560 CNY or 6.5% from 8,670 CNY/tonne from that before the festival.

 

China's Soybean Oil Weekly Price (CNY/Tonne)
Region		Grade	This week	Last week	Variation
South China	Guangzhou	GB Grade 1	9460-9480	8,870	590-610
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	9,050	N/A
		GB Grade 3	8,950	N/A
	Tianjin	GB Grade 1	9010-9030	8,470	540-560
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	9,100	8,540	560
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	9240-9280	8,720	520-560
		GB Grade 3	N/A	N/A
National average		GB Grade 1	9,250	8,670	580
		GB Grade 3	9,200	8,620	580

 

 

Inventory: Soybean oil stocks are fractionally higher this week under sluggish shipments during the festival, albeit a decline in soybean crush. In the week ending Feb 19, China’s soybean oil commercial inventories total 873,600 tonnes, up 37,000 tonnes by 4.42% from 836,600 tonnes from that before the festival (Feb 5), up 43,600 tonnes by 5.25% from 830,000 tonnes month on month, and down 154,000 tonnes by 14.99% from 1,027,600 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,114,300 tonnes.